An Open
Letter to Congress, The Treasury and Mint
Officials
by Wayne Homren

Dick Johnson
penned the following Open Letter to U.S.
government officials following news that coin
composition changes are included in a new budget
proposal. -Editor
To the credit of Numismatic News writer Darrin
Lee Unser, he found a statement buried deep in
President Obama's fiscal Year 2011 Budget, just
released. He found the section "Other Savings:
Coinage Material - Department of the Treasury."

Faced with volatile coinage metal prices, the
U.S. Treasury is still attempting to solve what
metal composition in which to strike cent coins.
Instead of looking into the future for the need
to even have low denomination coins, Treasury
officials persist in seeking piecemeal
solutions. This is in contraposition to the
statement by Mint Director Edmund Moy two years
ago to examine the entire coinage structure.

The Treasury needs to consult a futurist instead
of bowing to the pressure of numerous lobbyists,
most notable the zinc industry lobby which is
backing Americans for Common Cents. Their
lobbying efforts have been successful to the
present to retain the cent coin.

A futurist would undoubtedly submit that cents
and nickels should be abolished. The economic
need for these coins no longer exists, and would
decrease even more so in the future. Polls
reveal that citizens still want cent and nickel
coins around.

The only apparent reason for this is nostalgia.
However, this nostalgia is costing American
business millions of dollars every day in having
to inventory, handle and dispense these low
value coins. Tremendous savings would occur
across the spectrum of individuals, business and
government if the U.S. Mint would cease their
manufacture.

All prices would remain the same, right down to
the lowly cent. It is only the transaction
amount -- what Canadians call the "tally amount"
-- which would be rounded off to the nearest 10
cent amount, the lowest denomination coin
proposed to circulate. Studies have shown that
the criticism "venders would always round up to
the extra cost to the consumer" is not valid.
One Pennsylvania study proved the cost would be
less than one dollar per year for an average
family, if that.

The number of countries which have abolished
their lowest denominations coins is growing,
following the lead of Australia and New Zealand.
It has been an over whelming success in all
these countries.

What coins should America have in the future?
Dime. Half dollar. And Dollar, certainly. To
these should be added a new Five Dollar and Ten
Dollar coin. Coins are necessary for small cash
transactions. Paper and electronic transfer
would still remain for large transactions. A
futurist would agree coins will still be
absolutely necessary far into the future. We
will always have small transactions, from
vending machine purchases to incidental
purchases. The vending machine industry would
certainly welcome coins available in the above
denominations (this would eliminate their
greatest nuisance criticisms of problems
accepting paper dollars).

To satisfy Director Moy's request to examine the
entire coinage structure, here are proposed
coins that will be needed in the future and
their specifications:

The compositions are chosen for the following
reasons: 1) They are in line with present and
future costs, they would eliminate the metal
costing more than its face value. 2) They
purposely have several elements to discourage
counterfeiting. 3) They each have a different
color and weight for easy perception by
inspection alone. 4) They are typical coinage
metals with existing experience in coining
technology. 5) They increase in value with each
higher denomination. 6) The aspect of their
scrap technology is taken into consideration for
present coins when they will have to be recoined
well into the future.

The U.S. Treasury should take two immediate
actions. Take the suggestion of Chicago Federal
Reserve Bank Economist Francois Velde and
"rebase" the cent -- and the nickel -- to have a
value of 10cents. This can be done by a fiat
proclamation. Demand that all transactions be
rounded off the the nearest 10cents. These coins
and current dimes would be placed in the 10cent
slot in cash registers.

Second, start engineering a new mint for the
exclusive manufacture of the dime coin. I am not
asking that sand (source of ceramic) and bauxite
(source of aluminum) enter one end and dimes
come spewing out the other. But engineer a mint
where 20mm aluminum blanks would be struck then
coated with a ceramic surface. Perhaps the
ceramic could even be imprinted in color with a
variety of designs. Since aluminum is easily
coined, perhaps a press could strike 40 or 50
coins with every cycle of the press. After the
ceramic is applied, imprint a different state
design on the ceramic surface, for example.

Say it takes ten years to create such a mint.
All cents and nickels would stay in circulation
for that time -- at a value of 10cents each.
After ten years these coins would be recalled to
be melted and reformulated to be recoined.

The copper coated zinc was a brilliant choice
for cents since 1982. It can easily be
reformulated to brass, or used intact to coat
the zinc core. The zinc industry should spend
half of what they are spending for their
unnecessary lobbying efforts to keep the cent.
Instead spend this on research to coat bronze on
zinc for a larger Half Dollar coin. Instead of
whining and being an obstructionist they can
actually make more money providing bronze coated
zinc blanks for coining into Half Dollars well
into the future.

Scrapping the copper nickel metal in five cent
coins can provide the metal to be recoined into
the Dollar to $10 coins by adding various clad
operations.

A lot of thought has gone into this proposal.
This is what future coins could be.